Ask Rusty: Government Pension Offset (GPO)

by AMAC-Certified Social Security Advisor Russell Gloor

Dear Rusty:

Several years ago the husband of a friend of mine died before he collected any of his Social Security. She applied for widow benefits from his Social Security, but she was told that because she had never paid into Social Security and because she had a pension from her employer, she was not eligible to draw survivor’s benefits on his Social Security. What has this got to do with her not getting his Social Security? Please help us understand this.

Signed, Helpful Friend

Dear Helpful:

It sounds as though your friend’s survivor benefits are affected by something called the Government Pension Offset (GPO). The GPO affects people who have a pension from employment which did not contribute to Social Security, such as a State or local government agency, a school system, college or university, or even older Federal employees who were covered under the Civil Service Retirement System (CSRS). Under the GPO, Social Security reduces spousal and survivor’s benefits by $2 for every $3 received from a government pension. This can partially, and often totally, offset the Social Security benefit a person might otherwise be entitled to. For example, if your friend was entitled to a Social Security survivor benefit of $1,500 per month, and she is receiving a civil service pension of $3,000 per month, she would get no Social Security benefit because 2/3rds of her civil service pension ($2,000) is more than her Social Security survivor’s benefit. This appears to be what has happened in your friend’s case.

Public service employers who don’t participate in the Social Security program usually offer employees an enhanced alternative pension program designed to replace Social Security benefits. GPO was first enacted in 1977 in order to prevent those employees from “double dipping” by receiving both a pension from work where they did not pay into the Social Security system and Social Security (which they did not contribute to). The Government Pension Offset, as well as another Social Security rule called the Windfall Elimination Provision (WEP), as you can imagine, are not very popular with those affected by them. GPO affectsa non-covered worker’s spousal and survivor benefit, while WEP affects a non-covered worker’s Social Security retirement benefits and their spouse’s spousal benefit, but not their spouse’s survivor benefit. Despite their unpopularity these are, nevertheless, existing laws which affect Social Security benefits for those receiving a pension from work in which they did not contribute to Social Security.

The trend appears to be that more and more public service employers are now participating in the Social Security program. Even the Federal Government, which prior to 1984 didn’t participate in the Social Security program, switched to a retirement system called the Federal Employee Retirement System (FERS) which now requires employees to pay into Social Security and, thus, be eligible for Social Security benefits. Federal employees covered under FERS, and public service employees with a pension from an employer who participates in Social Security, are not affected by the Government Pension Offset.

For information, the Social Security Fairness Act of 2017 (H.R. 1205 and S.915) proposes to eliminate both the GPO and the WEP, and has been referred to appropriate committees in both the House and the Senate, but there is currently no estimated probability of passage.

The information presented in this article is intended for general information purposes only.

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